Kevin Cardiff of the European Court of Auditors addresses the Dean’s Speaker Series
The Dean’s Speaker Series had another event last Wednesday when Kevin Cardiff of the European Court of Auditors and also Auditor of the European Stability Mechanism visited Smurfit School. The Dean, Professor Ciarán Ó hÓgartaigh welcomed Mr. Cardiff to Smurfit. Mr. Cardiff is a decorated senior civil servant and regaled attendees with a detailed summary of economic history in recent decades, spanning the 1992 currency crisis and various iterations of the ERM up to the recent financial crisis of 2008 and beyond.
In a detailed address resembling memoirs, Mr. Cardiff described the tribulations of the 1992 currency crisis in fine detail – featuring newspaper clippings of the big events at the time including the days of major turmoil for Sterling and the Púnt, including the devaluation of the Púnt. He also touched on the advent of the Maastricht Treaty and the departure from the single currency of certain countries in its early days.
Mr. Cardiff described in detail the events of the 16th of September 1992, when the United Kingdom withdrew from the Exchange Rate Mechanism. What happened on this day was that Sterling had come under pressure from speculators who had begun a massive sell-off and the UK Government raised interest rates from an already high 10% to 12% with a promise that they would raise further to 15%, in a scenario that was unfolding by the hour. One of the causes of the acuteness of the crisis was the rules of the ERM, particularly that the Bank of England were required to accept any offer to sell Sterling.
The eventual advent of the European single currency was also addressed by Mr. Cardiff. He highlighted the widening of fluctuation bands via the Brussels Compromise of 1993 and Stages II and III of ERM, when mutual exchange rates between member currencies became fixed and the physical currency was introduced in the form of notes and coins.
Mr. Cardiff also gave a detailed review of the events of the financial crisis of 2008, including key developments in relation to the recapitalisation of financial institutions, which he also deals with in his book, “Recap”.
A short question and answer session followed Mr. Cardiff’s address, when the recent event of Brexit was noted and a discussion was had around the future for the European Union. All in all, the event was a thought-provoking and interesting perspective on recent economic history and food for thought in terms of what will happen next in the EU with respect to both regulatory developments and the overall structure of the Union.
Ciarán O’Shea ~ Year 2, Executive MBA